UK house prices rise modestly in July, while affordability improves
House prices in July rose by 0.6 per cent on a seasonally adjusted basis, taking the average to US$360,080, after a 0.9 per cent drop in June.
This raised the annual rate of growth to 2.4 per cent from 2.1 per cent, the figures from Nationwide Building Society showed.
Economists polled by Reuters had forecast a 0.3 per cent monthly rise and a 2.1 per cent annual increase for July.
Annual price rises are down from a peak of 4.7 per cent in December and Nationwide said demand had stabilised after the end in April of an exemption from stamp duty land tax on many lower-value house purchases.
House prices are now rising more slowly than consumer price inflation or wages and the cost of an average house has fallen to around 5.75 times average income from a record high of 6.9 in 2022.
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'After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates,' Nationwide chief economist Robert Gardner said.
The Bank of England (BOE) is widely expected by the market to cut its main interest rate to 4 per cent from 4.25 per cent on Aug 7.
However, economists are unsure how many further rate cuts are likely as inflation has picked up to close to double the BOE's 2 per cent target.
Nationwide said the interest rate on a typical five-year fixed-rate mortgage with a 25 per cent deposit had fallen to 4.3 per cent from a peak of around 5.7 per cent in late 2023.
Last month the BOE relaxed restrictions on high loan-to-income mortgages. REUTERS
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